Since last Friday, Chris Mahoney and his team have spent about 12 hours a day explaining to clients why, after decades of working at Merrill Lynch, they felt it was time to move to a new firm.
For Mahoney, a 33-year veteran at the wirehouse, leaving Mother Merrill for Raymond James was bittersweet.
"The people I worked with directly were all nice people. Everyone in that branch," Mahoney, 57, says. "But the bank, by nature, was less flexible, and it was becoming increasingly less flexible. That was the part that was not enjoyable."
Mahoney and his team oversee more than $2.9 billion, according to Raymond James. Of those assets, about $2.1 billion are held in-house while more than $800 million are held in retirement plans elsewhere.
Mahoney says that jumping over bureaucratic hurdles at Merrill became more difficult in the years following the merger with Bank of America.
"It was becoming more restrictive in terms of how we price our business and services. And there is obviously a platform change at Merrill and that was going to impact us in a pretty significant way," Mahoney says.
Merrill has been in the process of transitioning its advisors to Merrill Lynch One, which replaces five older platforms introduced in the 1980s and 1990s. More than 90% of advisors are now using Merrill Lynch One, which has more than $480 billion in client assets, according to the firm.
The firm did not comment on the team's departure.
The new platform has also brought other changes, including restrictions on discounting. Advisors wanting to offer a deal to clients would have to do so out of their own pockets, according to sources familiar with the matter.
Mahoney adds the group also wanted greater choice in investments.
"We used broad-based ETFs, and we like to complement those with active managers. And those that were available were of one variety. Some were very good, but they were of one variety," he says.
VALIDATION
The West Nyack, N.Y.-based team includes Chris Mahoney's brother Kevin Mahoney, Mark C. Marotta, Kristen Koluch, and Phil Murphy. A few years ago they started doing their due diligence on firms to potentially move to.
"We literally spoke to everyone and we came to the conclusion about a year ago that the present situation was untenable for us and our clients. We narrowed down our choices, and every time we met, Raymond James came up on top," he says.
For Raymond James, this is the second time this year that a multi-billion team joined the firm because of policy changes at the wirehouses. Earlier this year,
At the time, a Morgan spokeswoman said the firm was no longer able to accommodate the team's business model, which included serving some smaller banks in Caribbean and Latin American countries.
For Raymond James, these latest recruits validate the firm's approach, says Tom Galvin, North Atlantic regional director for Raymond James & Associates.
"Our advisors are our clients and our goal is to create and environment and platform that an advisor would wish to have. The complexity of their business says that we have the platform that advisors need," he says.
It also helps boost the firm's presence in the Northeast, where it has been underrepresented, Galvin says.
The St. Petersburg-based firm has opened new offices in places like Manhattan and Hartford, Conn. Galvin expected two to four new markets to open up this year in addition to recruiting for existing offices.
'I GREW UP WITH PEOPLE THERE'
Mahoney's group, meanwhile, is focused on first completing its transition and then growing its business to $10 million in revenue. The clients have been receptive to their move, Mahoney says.
Of Merrill, Mahoney says he will have "very fond memories" of his career there. "I spent most of my life there and I grew up with people there, but that part of my life is over."
But now, he's focused on the future; learning what new tools the group has access to and how he can serve his clients in new ways. And he's says he's excited to see how his team, which is comprised of three generations of advisors, grows into.
"That's what is really cool about our industry – if you can get a lot of likeminded people pulling in the same direction, it can be a lot of fun," Mahoney says.
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